Greg Clark's A Farewell to Alms

From the New York Times:

In Dusty Archives, a Theory of Affluence
By NICHOLAS WADE

For thousands of years, most people on earth lived in abject poverty, first as hunters and gatherers, then as peasants or laborers. But with the Industrial Revolution, some societies traded this ancient poverty for amazing affluence.

Historians and economists have long struggled to understand how this transition occurred and why it took place only in some countries. A scholar who has spent the last 20 years scanning medieval English archives has now emerged with startling answers for both questions.

Gregory Clark, an economic historian at the University of California, Davis, believes that the Industrial Revolution — the surge in economic growth that occurred first in England around 1800 — occurred because of a change in the nature of the human population. The change was one in which people gradually developed the strange new behaviors required to make a modern economy work. The middle-class values of nonviolence, literacy, long working hours and a willingness to save emerged only recently in human history, Dr. Clark argues.

Because they grew more common in the centuries before 1800, whether by cultural transmission or evolutionary adaptation, the English population at last became productive enough to escape from poverty, followed quickly by other countries with the same long agrarian past.

Dr. Clark’s ideas have been circulating in articles and manuscripts for several years and are to be published as a book next month, “A Farewell to Alms” (Princeton University Press). Economic historians have high praise for his thesis, though many disagree with parts of it. …

The basis of Dr. Clark’s work is his recovery of data from which he can reconstruct many features of the English economy from 1200 to 1800. From this data, he shows, far more clearly than has been possible before, that the economy was locked in a Malthusian trap _ — each time new technology increased the efficiency of production a little, the population grew, the extra mouths ate up the surplus, and average income fell back to its former level.

This income was pitifully low in terms of the amount of wheat it could buy. By 1790, the average person’s consumption in England was still just 2,322 calories a day, with the poor eating a mere 1,508. Living hunter-gatherer societies enjoy diets of 2,300 calories or more.

… The tendency of population to grow faster than the food supply, keeping most people at the edge of starvation, was described by Thomas Malthus in a 1798 book, “An Essay on the Principle of Population.” This Malthusian trap, Dr. Clark’s data show, governed the English economy from 1200 until the Industrial Revolution and has in his view probably constrained humankind throughout its existence. The only respite was during disasters like the Black Death, when population plummeted, and for several generations the survivors had more to eat. … Dr. Clark started to wonder whether natural selection had indeed changed the nature of the population in some way and, if so, whether this might be the missing explanation for the Industrial Revolution. …

A way to test the idea, he realized, was through analysis of ancient wills, which might reveal a connection between wealth and the number of progeny. The wills did that, , but in quite the opposite direction to what he had expected.

Generation after generation, the rich had more surviving children than the poor, his research showed. That meant there must have been constant downward social mobility as the poor failed to reproduce themselves and the progeny of the rich took over their occupations. “The modern population of the English is largely descended from the economic upper classes of the Middle Ages,” he concluded.

As the progeny of the rich pervaded all levels of society, Dr. Clark considered, the behaviors that made for wealth could have spread with them. He has documented that several aspects of what might now be called middle-class values changed significantly from the days of hunter gatherer societies to 1800. Work hours increased, literacy and numeracy rose, and the level of interpersonal violence dropped.

Another significant change in behavior, Dr. Clark argues, was an increase in people’s preference for saving over instant consumption, which he sees reflected in the steady decline in interest rates from 1200 to 1800.

“Thrift, prudence, negotiation and hard work were becoming values for communities that previously had been spendthrift, impulsive, violent and leisure loving,” Dr. Clark writes.

Around 1790, a steady upward trend in production efficiency first emerges in the English economy. It was this significant acceleration in the rate of productivity growth that at last made possible England’s escape from the Malthusian trap and the emergence of the Industrial Revolution.

In the rest of Europe and East Asia, populations had also long been shaped by the Malthusian trap of their stable agrarian economies. Their workforces easily absorbed the new production technologies that appeared first in England.

It is puzzling that the Industrial Revolution did not occur first in the much larger populations of China or Japan. Dr. Clark has found data showing that their richer classes, the Samurai in Japan and the Qing dynasty in China, were surprisingly unfertile and so would have failed to generate the downward social mobility that spread production-oriented values in England.

Hmmhmmh, well the Japanese and Chinese seem to be awfully bourgeois anyway, so I'm not sure what Dr. Clark's point is here … My guess is that the Industrial Revolution took both the bourgeois virtues, which the Japanese had in spades, and a little of the old "stroke of zigzag lighting in the brain" that the Japanese have always claimed they don't have compared to the more creative Europeans.

After the Industrial Revolution, the gap in living standards between the richest and the poorest countries started to accelerate, from a wealth disparity of about 4 to 1 in 1800 to more than 50 to 1 today. Just as there is no agreed explanation for the Industrial Revolution, economists cannot account well for the divergence between rich and poor nations or they would have better remedies to offer.

Many commentators point to a failure of political and social institutions as the reason that poor countries remain poor. But the proposed medicine of institutional reform “has failed repeatedly to cure the patient,” Dr. Clark writes. He likens the “cult centers” of the World Bank and International Monetary Fund to prescientific physicians who prescribed bloodletting for ailments they did not understand.

If the Industrial Revolution was caused by changes in people’s behavior, then populations that have not had time to adapt to the Malthusian constraints of agrarian economies will not be able to achieve the same production efficiencies, his thesis implies.

Dr. Clark says the middle-class values needed for productivity could have been transmitted either culturally or genetically. But in some passages, he seems to lean toward evolution as the explanation. “Through the long agrarian passage leading up to the Industrial Revolution, man was becoming biologically more adapted to the modern economic world,” he writes. And, “The triumph of capitalism in the modern world thus may lie as much in our genes as in ideology or rationality.”

What was being inherited, in his view, was not greater intelligence — being a hunter in a foraging society requires considerably greater skill than the repetitive actions of an agricultural laborer.

Okay, but, according to Clark, the people whose descendents survived in England weren't agricultural laborers so much as their bosses, the farmers who told the laborers what to do. And the English were among the most innovative farmers, with an agricultural productivity takeoff that preceded the Industrial Revolution and made it possible by freeing workers to leave the farm and take factory jobs.

Rather, it was “a repertoire of skills and dispositions that were very different from those of the pre-agrarian world.”

Reaction to Dr. Clark’s thesis from other economic historians seems largely favorable, although few agree with all of it, and many are skeptical of the most novel part, his suggestion that evolutionary change is a factor to be considered in history.

Historians used to accept changes in people’s behavior as an explanation for economic events, like Max Weber’s thesis linking the rise of capitalism with Protestantism. But most have now swung to the economists’ view that all people are alike and will respond in the same way to the same incentives. Hence they seek to explain events like the Industrial Revolution in terms of changes in institutions, not people.

Dr. Clark’s view is that institutions and incentives have been much the same all along and explain very little, which is why there is so little agreement on the causes of the Industrial Revolution. In saying the answer lies in people’s behavior, he is asking his fellow economic historians to revert to a type of explanation they had mostly abandoned and in addition is evoking an idea that historians seldom consider as an explanatory variable, that of evolution.

The decline in English interest rates, for example, could have been caused by the state’s providing better domestic security and enforcing property rights, Dr. Hoffman said, not by a change in people’s willingness to save, as Dr. Clark asserts. … [More]

Australian law prof Andrew Fraser offered a somewhat similar explanation for the English breakthrough a couple of years ago in an article that was censored by the Deakin Law Review. As I summarized in VDARE.com:

Perhaps the most intriguing of Fraser's many themes: his paradox that the same high level of "trust" (to use Francis Fukuyama's term) extending beyond kin that has allowed the English-speaking peoples to build self-governing institutions that square the circle of reconciling individualism with cooperation also threatens to undermine the Anglosphere—by making us suckers for self-sacrificing ideologies that more clannish immigrants laugh at.

In most countries, in most eras, you needed to belong to an extended family "mafia" for protection. Upper-middle class individuals in English-speaking countries, at least when not watching The Sopranos, generally just don't get the importance of extended families in the rest of the world. Anglosphere intellectuals are especially oblivious, for emotional reasons—they tend to despise their relatives, who often aren't as smart as they are, but frequently make more money.

The English were perhaps the first to break out of this rut. Fraser notes:

"Over time, individualistic social structures encouraged the emergence in England of the common law of property and contract and, later still, the emergence of impersonal corporate forms of business enterprise, all requiring cooperation between strangers…"

Some of the cultural attributes that emerged in Northwestern Europe that made individualistic polities possible include, include, according to Fraser:

"Only a people such as the English, characterized by the ‘non-kinship based forms of reciprocity’ associated with Protestant Christianity, monogamy and companionate marriage, nuclear families, a marked de-emphasis on extended kinship relations, and a strong tendency towards individualism could possibly succeed in creating such a 'society of strangers.’"

Fraser speculates that these attributes have genetic roots. While that’s certainly possible scientifically, we're still a number of years away from being able to test that idea empirically.

But even if the roots of our civic societies were purely cultural in origin, as they may well be, these are not tendencies that immigrants can or will choose to adopt immediately—especially in our era, which glorifies multiculturalism and denigrates the host culture's traditional values.

Fraser argues:

"This exposes a fundamental paradox built into the free and open societies of the West: The only racial groups able to fit seamlessly into the society of strangers constituting a civic nation are those whose members can easily shed the deeply-ingrained ethnocentrism and xenophobia characterizing most non-European peoples."

My published articles are archived at iSteve.com -- Steve Sailer